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State Board Report

November 2016

As NASBA and the AICPA work together to grow the CPA pipeline in quantity, they also need to be sure those CPAs have the skills that the market needs, AICPA 2016-17 Chair Kimberly Ellison-Taylor told the NASBA Annual Meeting. “The business of tomorrow will need CPAs to provide services in a range of new and emerging areas, such as cybersecurity. This is a significant issue impacting the profession right now,” the AICPA Chair said. “CPAs are poised not just to address this issue – but to be leaders in the discussion. Last month, the AICPA issued two sets of proposed criteria to help management design and describe their cybersecurity risk management programs, paving the way for the creation of a new cybersecurity examination engagement.”

Ms. Ellison-Taylor also stressed the need for CPAs to practice across state lines: “Sixteen states have responded to that need by adopting firm mobility. Washington and Louisiana led the movement this year by adopting firm mobility into their laws, and Illinois is poised to do the same. I want to congratulate those state CPA societies and State Boards of Accountancy for paving the way on this issue, and I’m encouraged to hear how many more states want to move on it in 2017.”

The AICPA Chair thanked the many State Boards who had commented on the AICPA’s proposal to change peer review administration nationwide. She encouraged those Boards that had not yet provided comments, to reach out to AICPA Vice President Jim Brackens to do so. Improvements in audit quality have already been seen in response to steps the AICPA has implemented. “Additionally,” Ms. Ellison-Taylor noted, “we are exploring how to move to a near real-time, ongoing system that would help firms catch and fix issues before an engagement is completed.”

When firms do not follow appropriate remediation procedures, “the AICPA is dedicated to working alongside State Boards of Accountancy to appropriately sanction those firms – whether its member or non-member firms,” Chair Ellison-Taylor assured the Boards. More than 250 non-AICPA member firms were referred to the State Boards over the last two years alone. There has also been enhancement of the process for notifying State Boards when AICPA members are disciplined for failing to comply with the Code of Conduct or when firms are terminated from the AICPA Peer Review Program. “In all these cases, we support and encourage State Boards to hold firms accountable, and to take action when they receive notice that a firm has not been complying with state regulations,” the AICPA Chair stated.

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